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Cloud computing is often cited as a way for SMBs to save money. Smaller business, which typically don’t have the resources necessary to maintain their own in-house computing infrastructures are often seduced by the convenience and flexibility of public cloud services. Amazon Web Services (AWS), Microsoft Azure and Google Compute Engine (GCE) are the Big Three in this area, and millions of businesses rely on them every day.

Unfortunately, with most of the public cloud services come a whole raft of hidden costs, and it’s not always easy to take back control. After all, since the service providers want to discourage customers from getting out, there’s usually something of a vendor lock-in in the form of data egress fees. Data egress refers to outgoing data which, in this case, is data being migrated from one cloud service to another, an on-premises device or to another region operated under the same service provider.

Unsurprisingly, uploading data to the cloud (data ingress) is usually free. However, when companies want to move anything out of the cloud, they’ll typically be charged data egress fees. Fees are charged on a per-gigabyte basis, with multiple fee brackets meaning that cost per gigabyte is reduced once you reach larger data loads. Nonetheless, the costs can still run into thousands of dollars per month, which can be crippling for any small business that relies heavily on data.

Ask any group of enterprise IT managers why they migrated to the cloud and most of them – if not all – will cite cost-savings. The cloud represents a new standard for enterprise applications, with Forbes reporting that 70% of all organizations have at least one app in the cloud as of late 2016. 90% of all organizations today are plan on running apps in the next few years.

The picture is clear: clouds save businesses money. However, although the cost-savings may be readily apparent when comparing cloud services to on-premises infrastructure, how do cloud providers match up with one another? What should customers look out for beyond the standard monthly subscription price?

Introducing Egress Fees

Most cloud service providers discriminate between various types of data transfer. Just like an international call costs more than a domestic one, so too does transferring data from your cloud to some far-off external destination. The fees for transferring data outside your cloud network are called data egress fees.

Data egress is the opposite of data ingress – transferring data from within your cloud to a destination also within your cloud – and most providers don't charge for ingress, but place a premium on egress.

For example, Google charges $.12 per GB for the first terabyte of data egress towards most destinations outside its servers. Amazon charges $.09 per GB for the first 10 TB of data egress. It's easy to see that any business relying on large transfers of data can quickly find itself overwhelmed with fees.

One of the main obstacles to using major cloud provider services is that most do not offer colocation services. Colocation is the ability to integrate client-owned assets and data with the existing cloud infrastructure – essentially keeping the most business-critical data elements at arm's reach.

Neither Amazon nor Microsoft allow for colocation services, so data uploaded on their cloud networks may end up residing in servers very far from the workstation handling the data. As physical distance increases, so does loading time and connection unreliability. The inability to have client-owned (or third-party) assets reside on their cloud networks is a serious disadvantage in terms of speed and cloud dependability.
For enterprises that already own and operate their own data centers, colocation is the heart of the hybrid cloud strategy. For businesses just entering the field, local third-party colocation service providers can make space for clients on their infrastructure, ensuring that the most often-used data is available locally.

Enterprises are moving their mission-critical deployments to colocation servers for two primary reasons:

Data Center Design Improvements: New advances in data center design have made outsourced colocation more cost-effective than building a dedicated data center. Colocation providers can offer power, space, and cooling at prices that individual companies cannot match.

Increased Computing Demands: Virtualization and the continuing drive to handle ever-greater workloads puts a strain on purpose-built data centers. Retrofitting an older facility is far more expensive from a Total Cost of Ownership perspective than using colocation services – even in the long-term.

This is an enormous advantage for companies that need to make large amounts of data immediately accessible in different physical locations – large enterprises and government institutions, for example. The only other alternative would be building and staffing several distributed data centers in different geographical regions at great expense.

How Colocation Ties into Cloud Management

John Hall, Head of Portfolio at Atos UK/Ireland, asserts that most organizations fail to effectively manage their cloud deployments. He says that the combination of re-positioning existing IT departments to use cloud services and the fact direct executive-level communication occurs exclusively with cloud service providers creates loss of visibility. C-suite decision-makers effectively, "don't know what they don't know".

Hybrid cloud services are becoming increasingly popular among enterprise-level businesses, and with them come security concerns unique to the hybrid cloud infrastructure.

According to a study by Avanade, 75% of C-suite executives believe that hybrid cloud integration should be the main area of focus for their company in 2017. At the same time, cloud security spending is expected to grow from $24 billion in 2016 to $26.4 billion in 2017.

Hybrid cloud technology offers enormous benefits to enterprises and large organizations. However, keeping hybrid cloud data secure presents unique challenges. Hybrid cloud service providers and clients need to work together to form reliable and secure strategies for data protection.

The main security goal for the hybrid cloud is configuring and maintaining a uniform policy across the entire cloud network – easier said than done, in most cases. To begin building a robust cybersecurity policy, enterprises must clearly define the following processes in a cloud processing-friendly way:

Infrastructure Policy: A hybrid cloud infrastructure policy needs to carefully delineate what processes and services occur on the private cloud and which ones occur on the public cloud. Geographically-relevant colocation processes need to be outlined as well. Without this policy, cloud management quickly degrades into a data free-for-all that is difficult, if not impossible, to secure.

Firewall Rules: Firewall rules become more complex as internal and external network connections are added to hybrid cloud infrastructure. Web application firewalls need to be customized for each environment in the cloud and narrowly focused for each. Incoming traffic needs to be forced through the firewall in environments where multiple subnets may allow firewalls to be bypassed.

IPS Signatures: Intrusion Prevention System (IPS) signatures need to be constantly updated cloud-wide. New threats appear on a disturbingly regular basis, and signature-based inspection is one of the most effective cybersecurity methods currently available.

User Authentication: User authentication remains one of the most common points of exploitation used by cybercriminals. Two-step authentication sho

It seems today that every enterprise solution has been relabeled as a “cloud solution” in order to fit today’s version of buzzword bingo. This leads to some level of confusion as to what a “cloud” really is, and what we mean when we talk about public clouds, private clouds, and hybrid clouds.

Cloud Infrastructure Basics

To address this question, we need to emphasize the difference between the cloud and traditional IT services. Cloud solutions typically refer to the use of public internet connectivity to make business processing power & storage available wherever it's needed. For example, instead of a customer relationship management (CRM) database being run and managed on servers in an internal datacenter, this application is hosted on someone else’s datacenter and connected to through the internet.

The Public Cloud

The biggest, most well-known cloud service providers offer public cloud services. Microsoft Azure and Amazon AWS are two of the biggest names in the public cloud market. Public cloud providers offer managed, decentralized IT services to their clients through an online portal.

In return for maintaining a data center and renting out its data processing power, businesses and organizations gain access to a reliable data infrastructure with no up-front equipment costs.

Benefits to the public cloud include:

Cost-Effective: Public cloud clients generally pay a strict monthly rate for using the cloud, which makes it a very easy budget item so long as they avoid hidden fees and charges.

Easy to Scale: Growth is easy to accommodate in a public cloud environment. Clients can adapt their subscription on an as-needed basis.

Drawbacks to the public cloud include:

Inflexibility: Since the client is not in control of its own IT resources, there is little room for data processing flexibility. If the services your public cloud provider offers don't fit your needs exactly, you might need to make compromises.

Security concerns: By delegating all of your data processing power to a third-party, you expose your data to risk. Although public cloud providers spend a great deal of resources on maintaining security, they can't always adhere to enterprise data security needs, especially in sensitive industries or fields.

The Private Cloud

An enterprise that already has its own equipment can implement a private cloud solution. In this case, existing infrastructure resources are decentralized and made available to the organization's employees, partners, and customers. This lets the organization retain a great degree of control, but it also forces it to assume responsibility for maintaining the equipment.

Even if a company has its own data center, it may find that the ongoing costs of maintaining a private cloud outweigh the benefits over time. Servers eventually need to be replaced, cybersecurity becomes increasingly complex, and organization growth needs to be accommodated continuously.